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Massachusetts Underpayment Penalty

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Massachusetts Underpayment Penalty

Answer

You will generally be subject to this addition to tax if you did not have withholding and/or estimated payments equal to 80% of the total tax liability required to be paid and your tax due after credits and withholding is greater than $400. The 80% requirement is reduced to 66 2/3% for individuals who receive two-thirds of their income from fishing or farming. If you failed to meet these requirements, you must complete and enclose Massachusetts Form M-2210 to calculate the amount you must add to line 47. You do not have to complete Form M-2210 if the balance due with your return is $400 or less.

You may not be subject to an underpayment penalty if you qualify for one of the following exceptions:

  • You are a qualified farmer or fisherman and are paying the full amount of the tax due on or before March 1, 2010;
  • You were a Massachusetts resident and were not liable for prior year taxes (where the taxable year was 12 months); or
  • The sum of your estimated payments and withholding equals or exceeds your prior year total tax due (where the taxable year was 12 months and a return was filed).

If you qualify for one of these exceptions, please fill in the oval marked "EX" under line 47 on Form 1 and enclose Form M-2210 indicating which of the exceptions applies to your circumstances. A limited number of taxpayers may also qualify for a waiver of the underpayment penalty for one or more installments if:

  • The underpayment was because of casualty or disaster; or
  • During the prior tax year or the current tax year you retired after reaching age 62 or became disabled and the underpayment was due to reasonable cause and not willful neglect.

If you think you qualify for one of these waivers, go to www.mass.gov/dor and use DOR's online application for abatement/amended return at
www.mass.gov/dor or enclose Form M-2210 and an explanatory statement with your return and fill in the oval marked "EX" under line 47. If your waiver is not for all four installments, complete Form M-2210 to calculate the underpayment penalty for the installments which are not covered by the waiver. Form M-2210 is available by visiting www.mass.gov/dor.


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Article Details
Views: 793 Created on: Jun 15, 2013
Date updated: Sep 24, 2015
Posted in: STATES, Massachusetts

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